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Chapter 6 – Understanding Markets

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Chapter 6 – Understanding Markets . Pages 67-70. Objectives. Understand what is meat by the term market mapping Define market size and growth and understand the factors that influence it Define market share and be able to calculate it. Market Mapping.

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Chapter 6 – Understanding Markets
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  1. Chapter 6 – Understanding Markets Pages 67-70

  2. Objectives Understand what is meat by the term market mapping Define market size and growth and understand the factors that influence it Define market share and be able to calculate it

  3. Market Mapping Market mapping is a technique that uses market segmentation to look at the features that distinguish different products or firms

  4. Small family cars Vs. Luxury cars

  5. Premium Price Small family cars Luxury cars Budget Price

  6. Benefits of Market Mapping Helps identify closest rivals and plan suitable competitive strategies Helps identify niches in the market which can be filled with the introduction of a new product or image If carried out through market research, it can help a firm discover the publics perception of its business/brand It may help a firm who wants to reposition itself in the market

  7. How is a market measured? Market Size Value of sales e.g. Beauty products, groceries Volume of sales e.g. Cars, computers

  8. Market growth Market growth is the percentage change in sales (volume or value) over a period of time It can increase as a result of extra sales or higher prices It is useful as it allows a company to identify potential sales

  9. Market Growth Declining markets will discourage competition Growing markets will encourage competition

  10. Factors influencing market growth Economic Growth; ↑ in GDP ↑ in disposable income Nature of product; luxury product or normal product Changes in taste; as lifestyles change certain products become more popular

  11. Factors Influencing market growth Social changes; the way people live Fashion; cooking, DIY, gardening

  12. Market Share Market share is the percentage or proportion of the total sales of a product or service achieved by a frim or a specific brand of a product

  13. Market share formula Sales of one product/brand/ company Market Share = X 100 Total sales in the market